Building a successful brand takes significant time and resources, but even the strongest brands face setbacks. These “brand transgressions” can arise from various sources, including the company’s own actions. While some businesses navigate these challenges successfully, many struggle to respond effectively, often worsening the situation. After examining 50 business case studies spanning five decades and multiple countries, we’ve identified eight key principles. These guidelines can help brands not only recover from short-term crises but also transform themselves for long-term success. Our research offers valuable insights for companies looking to protect and strengthen their brand in the face of adversity.
1. Do the Right Thing: Protect the Victim(s) First
When a brand faces a crisis, the first priority should always be the safety and well-being of those affected. Swift action to protect victims not only demonstrates genuine empathy but can also rebuild trust. Companies that prioritize victim safety over financial concerns often see their market share rebound and even grow in the aftermath of a crisis.
2. Take Accountability
Embracing accountability signals a brand’s willingness to own the problem and fix it. This approach can prevent further damage and avoid a defensive stance that might alienate customers and stakeholders. Brands that refuse to take accountability often face severe consequences, including leadership shake-ups and loss of market position.
3. Act With Lightning Speed
In today’s fast-paced world, quick and decisive action is crucial. Rapid response to a crisis can minimize damage to brand trust and help maintain control of the narrative. From public apologies to concrete actions like employee training or product recalls, speed is of the essence in crisis management.
4. Communicate Transparently
In an age of information abundance, transparency in communication is vital. Clear, honest communication with stakeholders builds credibility and reduces the likelihood of rumors and misinformation. Brands that attempt to hide information or use delay tactics often face more severe and prolonged consequences.
5. Choose Principle Over Profit
When profit becomes the overriding goal, brands risk encountering major problems. A strong ethical foundation can help navigate crises more successfully. Companies that prioritize short-term gains over safety and quality often face significant financial and legal repercussions in the long run.
6. Treat Each Life With Dignity
Respect for diversity and human dignity should be at the core of every brand’s values. Cultural insensitivity or discrimination can lead to severe backlash and long-lasting damage to a brand’s reputation, especially in our globally connected world.
7. Leadership Influences Organizational Culture
The behavior of leadership sets the tone for the entire organization. Leaders have the power to either create an environment that fosters misconduct or one that promotes ethical behavior and positive transformation. The roots of many brand transgressions can often be traced back to leadership decisions and attitudes.
8. Build Brand Authenticity
Authenticity is a brand’s best defense against crises. It means aligning actions with core values and fulfilling promises unconditionally. Authentic brands are more likely to respond to crises with accountability and thoughtfulness, minimizing excuses and addressing issues head-on. This authenticity can not only support recovery efforts but also help prevent transgressions in the first place.
Our research on past successes and failures of brands’ response to transgressions has led us to three conclusions:
1.Every brand, even the biggest and most famous ones, will face tough situations at some point. It’s just part of doing business.
2. These problems can either cause major damage if handled poorly, or become opportunities for the brand to improve if managed well.
3. These 8 key principles can form the parameters for brands bounce back and become even better after facing a problem.
Shalini Sarin Jain, Associate Professor of Management, Milgard School of Business, University of Washington, Tacoma
Shailendra Pratap Jain, Bret Wheat Endowed Professor of Marketing & International Business, Foster School of Business, University of Washington, Seattle
Based on the book: Managing Brand Transgressions: 8 Principle to Transform your Brand. Publisher: De Gruyter Brill. Available on amazon.in.
